What to Avoid During your Home Purchase

In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. Here are some things to refrain from during the home buying process to assure your transaction goes well.

Don't buy luxury items. Although you will be dreaming of ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to keep away from vacations and vehicle purchases until the closing of your loan. Financing your stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Because lending institutions are examining your bank accounts, a large cash purchase is also a mistake.

Don't get a new job. Consistency in your job history is a positive thing to lenders. Finding a new career (especially one with a better paycheck) may not change your ability to qualify for your loan. But for some people, switching jobs during the mortgage loan approval process could bring concern and affect your approval.

Don't switch banks or move cash around in your accounts. Your lending institution will require you to produce recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. Your lender is looking for a consistent flow of your money each month, in order to avoid fraud. No matter the reason, moving banks or moving money from one account to another could raise a red flag with your lender and slow your qualification process.

Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Your good faith deposit does not belong to the seller: it is actually yours until the transaction is final. Any good faith funds are to go toward your expenses closing; some FSBO sellers may not know this. We recommend that you put the funds into a trust account, or get a neutral person, like an attorney to hold them until the closing of the sale. Your contract should specify who keeps the earnest funds if the home purchase does not go through.

Amity Mortgage LLC can walk you through the pitfalls of getting a mortgage. Call us at 2037296681.

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